Alibaba and HKIA confirm plans for US$1.5bn Hong Kong air hub

Date: Friday, December 14, 2018Source: Lloyd's Loading List

Alibaba Group and Hong Kong International Airport (HKIA) have confirmed that the Chinese e-commerce giant will go ahead with a US$1.5 billion ‘smart logistics’ hub as part of an ongoing strategy to create a global air hub network.

Jack So Chak-kwong, Chairman of Airport Authority Hong Kong (AA) and Fred Lam, its CEO, met Alibaba founder Jack Ma and Group president, Global Business, Angel Zhao, in Hong Kong earlier this week, during which both sides expressed their “commitment to working closely to jointly build a global smart logistics network to foster more inclusive trade”.

In June this year, a joint venture led by Cainiao Network, the logistics arm of Alibaba Group, was awarded through an open tender exercise the right to develop and manage the hub, with a view to developing it into a world-class digital logistics centre in Asia, serving the fast-growing global cross border e-commerce trade and strengthening Hong Kong’s international competitiveness.

Cainiao Network announced at the time that it would lead a joint venture to invest approximately US$1.5 billion (approximately HK$12 billion) to build a world-class digital logistics centre at Hong Kong International Airport (HKIA). Cainiao will have a 51% controlling stake in the jv while China National Aviation Corporation Group Limited and Chinese courier firm YTO Express will hold 35% and 14% respectively.

The future hub will occupy a site of about 5.3 hectares, with an estimated gross floor area of 380,000 sqm, and will comprise air cargo processing, sorting and order fulfilment facilities.

Scheduled to commence operation in 2023, the hub will be future-proofed, with high design specifications for large-scale, cutting-edge robotics and automation as well as temperature-controlled features.

Cainiao noted that the logistics centre will handle tens of millions of parcels every year to meet the surging cross-border e-commerce needs of global SMEs, bringing an incremental cargo volume of approximately 1.7 million tonnes per annum to HKIA when it reaches full capacity.

“The Hong Kong hub will be yet another milestone on our way to achieving our goal of 72-hour global delivery and will further empower SMEs locally and globally to more readily tap the benefits of more inclusive globalization through cross-border e-commerce,” said Wan Lin, President of Cainiao Network.

Cainiao is already building up a global network of air hubs. Apart from its home hub at Hangzhou in China, where its parent company is based, has so far announced or signed deals with partners in Kuala Lumpur, Dubai, Moscow and Liège, in Belgium. Alibaba Group plans to invest more than 100 billion yuan in an efficient smart logistics network that drives 24-hour delivery in China and 72-hour delivery to the rest of the world.

HKIA, the world’s busiest cargo airport for the last eight years, said the hub development aligns with its cargo development strategy to capture opportunities arising from increased cross-border e-commerce and related businesses, as well as the growth in the logistics business related to temperature-controlled products such as pharmaceuticals.